Tax

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Taxation

An aspect of fiscal policy

Policies[show]

Economics[show]

Collection[show]

Noncompliance[show]

Types[show]

International[show]

Trade[show]

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Total revenue from direct and indirect taxes given as share of GDP in 2017 [1]

A tax is a compulsory financial charge or some other type of levy imposed on a

taxpayer (an individual or legal entity) by a governmental organization in order to
fund government spending and various public expenditures.[2] A failure to pay, along with
evasion of or resistance to taxation, is punishable by law. Taxes consist
of direct or indirect taxes and may be paid in money or as its labour equivalent. The first
known taxation took place in Ancient Egypt around 3000–2800 BC.
Most countries have a tax system in place to pay for public, common, or agreed national
needs and government functions. Some levy a flat percentage rate of taxation on
personal annual income, but most scale taxes based on annual income amounts. Most
countries charge a tax on an individual's income as well as on corporate income.
Countries or subunits often also impose wealth taxes, inheritance taxes, estate
taxes, gift taxes, property taxes, sales taxes, payroll taxes or tariffs.
In economic terms, taxation transfers wealth from households or businesses to the
government. This has effects which can both increase and reduce economic growth and
economic welfare. Consequently, taxation is a highly debated topic.